h Revaluation of land use rights increase 18 RMB i Unrecognized losses of

H revaluation of land use rights increase 18 rmb i

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h. Revaluation of land use rights increase 18 RMB. i. Unrecognized losses of subsidiaries decrease 182 RMB. j. Pre-operating expenditures decrease 169 RMB. k. Effects of the above adjustments on taxation decrease 1,179. Compared the net profit between the IFRS and U.S. GAAP, the net profit of IFRS is higher 3,984 RMB than U.S. GAAP. The reasons are following: (RMB million) a. Foreign exchange gains and losses increase 76 RMB. b. Capitalization of property, plant and equipment increase 12 RMB.
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5 c. Reversal of deficit on revaluation of property, plant, and equipment increase 86 RMB. d. Depreciation on revalued property, plant increase 3,998 RMB. e. Disposal of property, plant and equipment increase 1,316 RMB. f. Exchange of assets increase 23 RMB. g. Reversal of impairment of long-lived assets, Net of depreciation effect increase 47 RMB. h. Capitalized interest on investment in associates increase 141 RMB. i. Deferred tax effect of U.S. GAAP adjustments decreases 1,715 RMB. 2. Identify the main areas difference for CPAA between: a. PRC GAAP and IFRS Major Differences PRC GAAP IFRS Depreciation of oil and gas properties Depreciated on straight-line basis. Depreciated on the unit of production method. Disposal of oil and gas properties Recognized as income or expense in the income statement. Measure as the difference between the estimated net disposal proceeds and the carrying amount of the asset. Not recognized unless the retirement or disposal encompasses an entire property. Capitalization of general Only borrowing costs on To the extent that funds
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6 borrowing costs funds that are specially borrowed for construction are capitalized as part of the cost of fixed asset. are borrowed generally and used for the purpose of obtaining a qualifying assets, the borrowing costs should be capitalized as part of the cost of that asset. Acquisition Accounted by the acquisition method. Under the acquisition method, the income of an acquiring enterprise includes the operations of the acquired enterprise subsequent to the acquisition. The difference between the cost of acquiring Sinopec National Star and the fair value of the net assets acquired is capitalized as an exploration and production right. Accounted under the common control of Sinopec Group Company. Accordingly, the assets and liabilities of Sinopec National Star, Sinopec Maoming, Xi’an Petrochemical and Tahe Petrochemicals acquired have been accounted for at historical cost and the financial statements of the Group for period
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7 prior to the Acquisition have been restated to include the financial statements. Gains from issuance of shares by a subsidiary The increase in the company’s share of net assets of a subsidiary after the sale of additional shares by the subsidiary is credited to capital reserve. The increase is recognized as income. Gain from debt restructuring Credited to capital reserve. Recognized as income. Revaluation of land use rights Land use rights are carried at revalued amounts.
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  • Fall '14
  • Depreciation, Generally Accepted Accounting Principles, PRC

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